Month: March 2019

In a blog post published on March 29th, cryptocurrency exchange Coinbase has announced a brand new service for its investors – staking crypto assets to accrue value.

Coinbase Custody, which serves as a storage facility for institutional investors, is looking to expand its suite of services to include staking — a means by which Proof-of-Stake (PoS) cryptocurrency networks encourage activity. The exchange will start off with offering staking for Tezos (XTZ).

Proof-of-stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. In contrast, the algorithm of proof-of-work (PoW) based cryptocurrencies such as Bitcoin uses mining; that is, the solving of computationally intensive puzzles to validate transactions and create new blocks.

In PoS-based cryptocurrencies it is required of the users to participate by depositing assets to the network and then helping validate transactions and create new blocks. As a result, they receive payouts much like traditional miners in a PoW system.

Additionally, users who have assets to stake but don’t want to take part in the arduous process can instead delegate their assets to someone else. Participants who choose to stake their crypto assets earn passive income, which ranges from around 5% to 25% annually, depending on the network and the level of participation.

In order to win over institutional investors who might be wary of the risk/reward profile of PoS, Coinbase Custody is assuring its clients that all staked coins will stay in fully-insured cold storage. As such, the exchange will post the necessary bond to bakers out of its own pocket; therefore there is “zero risk” to its custody clients.

Through its offline storage service, investors will be able to participate in networks such as Tezos using Coinbase as a regulated intermediary.

Sam McInvale – head of product at Coinbase Custody – has affirmed that one of the reasons why the exchange is starting off with Tezos and later on following on with other delegated PoS is especially because they are able to keep their clients’ funds in cold storage at all times.

He demonstrated that in the case of Tezos, bakers must post a bond equal to 10% of the total being staked. Hence if a client makes a $100 million worth of XTZ deposit, Coinbase would post a bond of $10 million worth of the tokens to its baker to meet that.

According to the exchange, clients will have the opportunity to make a return on their XTZ, which has been estimated at an annual return of around 6.6%, after all Coinbase fees have been deducted.

Custody clients with Tezos tokens will be automatically delegated from cold storage to the Coinbase baker. However, the exchange does not currently have plans to allow its custody clients to delegate to other external bakers.

Following this announcement, Coinbase revealed as well that it would add similar support for decentralized autonomous organization (DAO) MakerDAO’s governance token Maker (MKR), with further tokens to receive support throughout the year, which Coinbase Custody clients will be allowed to vote on.

Huobi Global’s U.S. division is expanding its team by introducing a department geared towards serving institutional clients.

Katelyn Mew will lead the new group at Huobi US. Mew has a rich resume with previous positions at asset management firm BlackRock and Charles Schwab. Oren Blonstein is another hire that will be working alongside Mew in the new division.

“We set up a new institutional sales and customer service group just to have some focus and resources on this segment of the market where we see a lot of the growth coming from,” according to Blonstein.

Huobi has identified an increased demand from institutional clients and is set to capitalize on the opportunity, opening with services such as token lending and over-the-counter(OTC) trading.

“We’re entering the market now with a real institutional offering, we’re definitely going to be offering some new products and services,”

Blonstein, as the vice president of technology in Huobi US, has stated that the main advantage of the platform is that people will be connected to traders outside of the U. S. as Huobi has the fourth largest trading volume in the world and it is based in Singapore.

“So if you’re in the U.S., if you want to access to liquidity outside the U.S. … you need to do that through a U.S. platform.”

In a statement, Mew said the company would offer “sophisticated trading systems and a trusted marketplace.”

“Unfortunately, the current landscape is significantly behind the traditional financial services industry. As more and more institutions integrate digital assets into their portfolios, they’ll need trusted, secure and compliant partners, such as Huobi.com,” she added.

While Blonstein did not single out any names, he stated clients are already being on-boarded.

To ensure no pitfalls for clients, the company has all the needed licenses and institutional investors will be protected in all cases, according to Blonstein. As a result, investors will be able to tap into liquidity outside o the country but via a U.S.-based platform that is fully compliant with local regulations.

Based in San Francisco, Huobi U.S. has money transmission licenses in almost all U.S. states, with petitions out to those jurisdictions it still needs a license in. The entity is also registered as a money services business (MSB) with the Financial Crimes Enforcement Network (FinCEN).

At some point, Huobi U.S. will even seek a BitLicense through the New York Department of Financial Services.

Blockchain-based consortium AdLedger has managed to get The Hershey Company – a leading American chocolate production company – on board for its blockchain consortium. The news was reported by media outlet Adweek.

Hershey is joined by French media group Publicis Media and The Global Audience Based Buying Conference & Consultancy (GABBCON) at AdLedger.

AdLedger is a non-profit organization founded in 2018 by IBM, Tegna and blockchain firm MadHive. It is a blockchain consortium that promotes the use of blockchain and develops shared ledger technologies for the digital advertising market. Other well-known industry names have been part of the non-profit organization such as IPG Reprise Digital, GroupM and Omnicom, which came from Tenga and Madhive.

Vinny Rinaldi, who is the head of addressable media and technology at Hershey, has disclosed that the company will be involved in advertising as well as in the distribution of blockchain technology, which could be extended to the operation of chocolate factories.

According to Rinaldi, this will facilitate the process of tracing cacao “from bean to bar.” She further mentioned that the adoption of blockchain technology would signify a “massive shift in the way that we think.”

Meanwhile, the new board member who heads the digital investment and standards of Publicis Media, Yale Cohen has stated that the agency considers AdLedger as a means to develop industry in large standards, whilst blockchain is still in its earlier days, and also discover how it will be used to create trust within the digital advertising industry by lowering scam rate on the market. Cohen strongly believes that blockchain still remains the brilliant object in the room and he believes that the ability to solve the various solutions will help to take the conversation forward.

Many reports from last year pointed at a lack of data transparency and processes within the advertising industry. It is widely believed that blockchain is able to address all these issues by making sufficient information available to every person within the industry mostly on how publishers verify their traffic and the processes that advertising agencies and other agents follow so as to guarantee that they work with publishers with verified traffic.

Last year, IBM and Salon Media piloted a proof-of-concept blockchain product developed by AdLedger which was named as The Campaign Reconciliation Project. This product is going to reduce the intermediaries between the publishers, consumers and advertisers, which currently leave the industry vulnerable to high-tech ad fraud, such as bot fraud and domain spoofing.

Crypto exchange OKEx has announced its plans to develop and launch a decentralized exchange (DEX) on its own blockchain. The news was announced through a blog post.

According to the blog post, the company has been developing its own blockchain called OKChain, which will serve as the foundation for its “first” decentralized exchange – OKDEx. Currently, the OKChain is in the final development stage. A test network launch is expected later this June.

Furthermore, it was revealed that OKEx’s native utility-token OKB will be placed onto the ERC-20 blockchain by the end of April, and will be moved to the OKChain mainnet once the new network becomes stable. Presumably, OKB will also be used for token pre-sales.

Citing from the blog post :

“OKB will be the native token of the OKChain network, which can be used to settle transaction fees, or used in the decentralized apps (Dapps) developed on OKChain.”

At the moment, OKEx is the world’s eighth largest cryptocurrency exchange by adjusted daily trade volumes.

The exchange has been quite busy these past months, working on expanding its presence globally as well as working on developing its own blockchain.

Most recently, in February, the company launched support for Thai baht-crypto trading on its client-to-client (C2C) platform, with only Bitcoin (BTC), Tether (USDT), Ethereum (ETH) and Litecoin (LTC) being traded with the Thai baht on the exchange’s peer-to-peer platform.

A month prior to that, it was reported that Star Xu – founder of exchange services provider OKCoin and OKEx – had bought a controlling share in LEAP Holdings, which is a Caymans Island-incorporated construction engineering company and is listed on the Hong Kong Stock Exchange.

OKEx launched as well a new crypto derivative product called Perpetual Swap last December. The product allows users to speculate on the future value of Bitcoin/USD, all according to OKEx’s index. In addition to that, OKEx’s perpetual swaps have no expiration, denoting that positions can be held indefinitely.

Meanwhile, Binance, the world’s largest crypto exchange by adjusted trading volume, is also launching a DEX on its own blockchain network, which has already been tested out during its public network testing in February. As such, users were allowed to create wallets and interact with the exchange’s interface. In an effort to increase the number of people testing out the network, Binance offered a trading competition with prizes of $100,000 in its native token BNB.

Exchange and social network for trading eToro has acquired Firmo – a Danish smart contracts developer – for an undisclosed amount, according to a press release published on March 25th.

According to the press release, this acquisition will allow the multi-trading assets platform to grow and expand its tokenized financial assets, citing eToro CEO Yoni Assia:

“The acquisition of Firmo will enable eToro to accelerate the growth of our tokenized assets offering. Blockchain and the tokenization of assets will play a major role in the future of finance. We believe that in time all investible assets will be tokenized and that we will see the greatest transfer of wealth ever onto the blockchain.”

Following this acquisition, the team at Firmo will act as an internal innovation team, which will handle the process of the tokenization of all eToro’s assets. This process will include as well the research and development of infrastructure dedicated to the representation of assets and trade execution on blockchain.

eToro’s recently acquired firm provides smart contracts for derivatives that will ensure its seamless access on any major blockchain, by which is meant that exchanges can use Firmo’s programming language – FirmoLang – to build products like crypto derivatives or P2P lending services. The domain specific contract language can be translated by the company’s software onto platforms such as Ethereum (ETH), EOS or NEO.

CEO Yoni Assia asserted that the company aims to become an active player in blockchain adoption and consolidation.

Meanwhile, CEO and founder of Firmo Dr. Omri Ross has stated that the rapidly growing crypto and blockchain industry has spurred an explosion of financial innovation, however he believes there are a few hurdles that hinder mass adoption and assimilation within the legal framework. The goal of this new venture is to enable their users to trade any asset on a global scale with immediate settlement by tokenizing assets as well as handling all essential trade processes on the blockchain.

Concurrently, eToro has also announced the listing of Tron (TRX) on its cryptocurrency trading service, which was launched at the beginning of this month. Earlier in March, eToro had also launched crypto trading services in the United States.